TCS Q2 Results Review: Dolat Capital Upgrades Rating To 'Add' But Trims Target Price — Here's Why

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

Dolat Capital Report

Tata Consultancy Services Ltd. posted subdued constant currency revenue growth of 0.8% QoQ (below 1.2% estimate) amid persistent macro weakness and continued cautious client spending.

Operating profit margin improved to 25.2%, up 72 bps QoQ (our estimate 24.7%), as forex gains, operational efficiencies, and pyramid rebalancing (headcount down 3.2% QoQ) offset 1-month wage hike impacts.

Management remains confident about delivering better H2 growth; TCV improves to $10 billion ($42 billion on a trailing twelve months basis up 9% YoY) as large and mega deals provide visibility for future growth, though the pace of conversion into revenues will be crucial to monitor.

Commentary highlighted entry into asset-heavy Data center biz, which raises some concerns regarding near-term growth recovery prospects.

We lower our FY26E/FY27E EPS estimates by 1.7%/2.5% (FY28 introduced), but in view of recent price corrections, revise our rating to ‘Accumulate’ with target price of Rs.3,380 valued at 22x on FY28E

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.